Residential mortgage

Residential mortgage – the Law of Contracts establishes the residential mortgage as legal security for loan, used for purchasing a house or apartment. I.e. the buyer pledges his/her home to the creditor. If the borrower fails to cover the monthly installment, then the lender (usually a bank) is entitled to demand payment of the whole mortgage loan immediately. And in case of continuous failure by the borrower to do so, then the house or the apartment, used for a security, may be taken to a public auction by the local bailiff, where the received money will be forwarded to the lender (creditor) for satisfaction of the debt due to them.

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